How to Register My Business in Kentucky

by Jennifer Kiesewetter in August 17th, 2021
bridge over water during sunset

TLDR

  • As of 2020, Kentucky is home to 355,998 small businesses, making up 99.3 percent of all companies, employing almost 44 percent of all Kentucky employees.
  • To register your startup in Kentucky, you'll need to satisfy several federal, state, and local requirements. However, before registering your startup, it’s a good idea to research the market and potential competitors, map out your financing, plan for operations and personnel, and create a business plan.  Founders can consult resources provided by the U.S. Small Business Association, helping them with the planning stage.
  • In addition to creating a business plan, before you register your startup in Kentucky, you must also determine your organization's legal ownership structure.
  • Your chosen business entity determines the next steps in registering your startup. For example, if you choose a corporation, an Articles of Incorporation with the Secretary of State’s office. On the other hand, suppose you choose an LLC for your business structure. Then, you would file your Articles of Organization with the Secretary of State’s office.
  • You’ll also need to select a registered agent and a distinguishable name.
  • Depending upon your chosen entity for your startup, you will have filing fees due when registering your business. Also, depending upon your entity, you may be liable for Kentucky’s various taxes, such as the state income taxes for both corporations and limited liability companies, if you have employees, employment taxes, and other business taxes and licenses.
  • Kentucky offers several programs and certifications, allowing you to showcase the minority ownership of your startup.

Known for its horses, bourbon, and college basketball, Kentucky offers much for its citizens, including its entrepreneurs. As of 2020, Kentucky is home to 355,998 small businesses, making up 99.3 percent of all companies, employing almost 44 percent of all Kentucky employees.

Additionally, Kentucky is ranked sixth for the “lowest cost state for new corporate headquarters.” Plus, Kentucky is home to 400+ international companies. Also, located centrally in the U.S., Kentucky has five commercial airports, 19 interstates, and 2800 miles of rail, offering accessible infrastructure for shipping products.  

If you consider registering your startup in Kentucky, this article will walk you through what you need to know.

How to Register a Startup in Kentucky

To register your startup in Kentucky, you'll need to satisfy several federal, state, and local requirements. However, before registering your startup, it’s a good idea to research the market and potential competitors, map out your financing, plan for operations and personnel, and create a business plan.  Founders can consult resources provided by the U.S. Small Business Association (SBA), helping them with the planning stage.

Once you’ve identified some of your business’s operation basics, it is then time to register your start-up. Read on to learn more about registering your business in Kentucky.

Determine Your Startup’s Entity Structure

In addition to creating a business plan, before you register your startup in Kentucky, you must also determine your organization's legal ownership structure. According to Kentucky’s One Stop Business Portal, two of the most critical questions about your startup that you need to answer are:

  1. “How does the structure impact my personal liability for things that happen in the business?
  2. How does the structure affect the amount of tax I will have to pay?”

Like most legal and tax decisions, it’s best to ask a tax attorney or accountant experienced in Kentucky law before deciding on which business entity to choose. Additionally, you can use Kentucky’s “Choose a Structure Wizard,” helping you to make a decision.

In the Commonwealth of Kentucky, you may organize your startup as a(n):

  • Corporation
  • Limited Liability Company (LLC)
  • General Partnership (GP)
  • Limited Partnership (LP)
  • Limited Liability Partnership (LLP)
  • Limited Liability Limited Partnership (LLLP)
  • Sole Proprietorship

Your chosen business entity determines the next steps in registering your startup. For example, if you choose a corporation, an Articles of Incorporation with the Secretary of State’s office.

On the other hand, suppose you choose an LLC for your business structure. Then, you would file your Articles of Organization with the Secretary of State’s office.

Identify Your Registered Agent

You’ll also need to select a registered agent. According to SCORE Association, a “registered agent is simply a person or entity appointed to accept service of process and official mail on your business’ behalf.” You can designate an individual or an entity as your registered agent. Further, your entity itself can serve as the registered agent.

According to the Secretary of State’s office, “[s]ervice on the registered agent is deemed to be service on the entity, regardless of whether the registered agent actually forwards the notice to the entity. Any time an entity changes its principal office, registered agent or registered office, it must file a statement of change with this office.”

Every registered entity in Kentucky must have a registered agent. It is not optional.

Submit Your Formation Forms

When you register in Kentucky, you must first determine if your startup is domestic or foreign. A domestic entity is an entity originally registered in the Commonwealth of Kentucky. A foreign entity is an entity formed outside of the Commonwealth of Kentucky. 

The filing requirements can often be different for domestic and foreign entities. For example, foreign corporations require a $90 filing fee, where domestic corporations require a $50 filing fee.

Additionally, depending on your chosen entity, you’ll file different forms with Kentucky’s Secretary of State. These forms can be downloaded from the Secretary of State’s website.

If you are a sole proprietor, you don’t have to register your startup with the Commonwealth of Kentucky to begin operations. However, as discussed further below, you must file for an assumed business name (of doing business as name), so you don’t have to use your personal name.

What to Do Next

After you submit your formation forms, registering your startup with the State, you’ll also need to obtain a federal employer identification number for banking and tax filings. Additionally, you’ll need to check in with the Commonwealth of Kentucky and your local city and county to see if there are any additional business registrations required, such as a business license.  

Founders can check the business licensing requirements on Kentucky’s Department of Revenue’s website. For local permits, depending upon your startup, you may need to obtain an alarm permit, a health permit, a building permit, a signage permit, or a zoning permit.

Do I Need to Register a Business Name in Kentucky?

When you’re ready to register your startup, like other states, Kentucky requires you to choose a unique business name, differing from any other registered businesses in the State.

To check your desired business name, you can preliminarily check its availability through Kentucky’s Name Availability Search or by contacting the Secretary of State.

If you’re not quite ready to register your startup yet, you may reserve your startup’s name for up to 120 days. To do so, you’ll file an Application for a Reservation or Renewal of Reserved Name, along with a $15 filing fee.

How to File a DBA

In Kentucky, founders can also file for assumed names, often referred as “doing business as” or DBA names. To do so, you would file a Certificate of Assumed Name, along with a filing fee of $20.

Similar to your startup’s formal name, your DBA should also be “distinguishable upon the record of the Secretary of State from any other name filed and on record with the Secretary of State.” If your startup uses more than one DBA, for example, for different product lines, then a separate certificate must accompany each assumed name.

If you have a sole proprietorship, Kentucky law requires that you file a Certificate of Assumed Name with the county clerk where you—as the sole proprietor—conducts business.

Any filed assumed name is effective for five (5) years from the filing date. You may file a renewal for a DBA within six (6) months after the initial expiration. It would be prudent to calendar these renewals so you don’t miss a deadline on keeping your assumed name.

How Much Does It Cost to Register a Startup in Kentucky?

Depending upon your chosen entity for your startup, you will have filing fees due when registering your business. For example, if you register as an LLC, corporation, or limited partnership, you’ll pay a fee of $40, which is much less than other states. However, as a foreign entity, your filing fee will differ. For example, an Application for Certificate of Authority for foreign entities is $90.

Also, depending upon your entity, you may be liable for Kentucky’s various taxes, such as the state income taxes for both corporations and limited liability companies, if you have employees, employment taxes, and other business taxes and licenses. To better understand your state tax obligations as a startup, you should consult with an accountant familiar with Kentucky tax laws.

Further, after submitting your registration forms, you need to learn about any required State or local licenses, such as a business license. You must also understand what annual registrations and fees are required of your startup, such as annual reports or sales and use tax, which will differ per entity.

How Do You Register as a Minority-Owned Business in Kentucky?

Kentucky offers several programs and certifications, allowing you to showcase the minority ownership of your startup. For example, the Minority and Women Business Enterprise (MWBE) Certification Program, administers a certification program that encourages “growth among Kentucky businesses owned by women and minorities and assists those businesses with expanding their markets. The certification also allows minority and women owned businesses to compete for work in states outside of the Commonwealth of Kentucky that require certification by a statewide body.”

In addition to this statewide certification program, Kentucky also offers resources on federal and local governmental programs as well as private programs, including the Women-Owned Small Business Federal Contract Program, the Service-Disabled Veteran Owned Businesses, the Women's Business Enterprise National Council certification program, the National Women Business Owners Corporation certification program, the US Women's Chamber of Commerce certification program, the Tri-State Minority Supplier Development Council certification program, and the Louisville Metro Government certification program.

What Are the Benefits of Locating Your Startup in Kentucky?

Kentucky has many benefits for founders that want to register their business in Kentucky. Here are some key benefits:

  • Kentucky is the no. 1 automobile producer in the U.S. per capita;
  • Kentucky is the only State with three international air shipping hubs, including Amazon Prime, UPS, and DHL;
  • Kentucky’s business costs are the lowest in the U.S.;
  • Kentucky has the lowest industrial power costs of any State east of the Mississippi River; and
  • Kentucky has a highly-skilled workforce

What Are the Drawbacks of Locating Your Startup in Kentucky?

Like any state, there are some drawbacks to locating your startup in Kentucky, although not many. Here are some to consider:

  • Kentucky has pleasant weather with four distinct seasons. However, you’ll also encounter significant storms and tornados during the year.
  • Kentucky’s income tax is a flat rate of five percent.

We can help!

At AbstractOps, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most—your business. If you're looking for help registering your Kentucky startup, we can get your documentation ready, overall shepherding this process to ensure it's done right. Drop us a note at hello@abstractops.com.

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